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Metaphors in the Language of Bankruptcy

Bankruptcy law can be complicated and confusing to the average layman. That is why the American judicial system certifies lawyers that have been educated in the field of bankruptcy law. Bankruptcy attorneys are formerly trained to help the average layman better understand bankruptcy laws so the layman can make informed decisions when going through the judicial system available to them. To complicate the issues, there are metaphors in the language of bankruptcy. Continue reading

Free Consults with Bankruptcy Attorneys

Lets face it. When most people finally face the reality they are bankrupt, they are at the place where it can be very hard for them to pay for the help they need to get out of their financial predicament. Most bankruptcy attorneys understand their financial condition, and are willing to provide a free consultation in order to determine whether or not they are in a position to help the debtor. This article is about what some of you may need to know before you embark in free consults with bankruptcy attorneys.

American Bankruptcy Institute Law Review

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Bifurcation During a Chapter 13 Bankruptcy

In bankruptcy law, bifurcation is the splitting up of the responsibility to pay debts to your creditors. This can happen when there is a divorce during the time a married couple has filed a bankruptcy jointly. Normally, a divorce will effect a chapter 13 bankruptcy more than it will a chapter 7 bankruptcy if a bifurcation is the result. Continue reading

Robbing Peter to Pay Paul in Chapter 13 Bankruptcy

A chapter 13 bankruptcy, called the wage earner’s bankruptcy, is a reorganization plan for individuals to pay back a part or all of their unsecured debts over either a 3 or five year plan. If you are in a 100% payback plan, you can conceivably borrow money back from your 401 (k) retirement plan to pay your bankruptcy plan off early. Why rob Peter to pay Paul? Continue reading

Divorce, Job, and Bankruptcy

Two of the leading causes for bankruptcy are losing a spouse’s income through a divorce and losing your own job. Many divorces do not end up financially equitable. The eventual separation comes with a large price. For whatever reason, pride or downright vindictiveness, couples who divorce often split the sheets, and their lawyers end up with most of their financial resources. Women, despite common perceptions otherwise, often take the largest financial hit in a divorce. They normally end up with the children to take care of after the divorce, and because many did not work during the marital relationship outside the home, they often don’t have the skills to enter the work force with an adequate paying job once divorced. Too, the child support historically comes at first, but many divorced fathers who don’t end up with the children will stop making child support payments at some point and time, which can be financially devastating to women without work skills. Combine all these facts with a woman who loses a decent job, and you have a recipe for bankruptcy.

This personal bankruptcy story was posted on the internet in January of 2011 as comments in a bankruptcy discussion: “I divorced about 5 years ago and moved with my work. I am a single mom. I lost my job 2 years ago, used up all my savings. I also accumulated a lot of credit card debt. I work and make just enough to pay the basics. I am being sued by [a credit card company] and know I need to answer in 20 days. I would like to ask for an extension to find a good bankruptcy attorney. How do I do this?”

The female debtor in this personal bankruptcy illustration is a single mom, divorced, unskilled, has lost her job and replaced it with a lower paying job, is in credit card debt, and is being sued by her credit card company. She wants to know how to buy time from the lawsuit in order to have enough time to find a bankruptcy lawyer. At least, she is most likely on the right track.

The moment you file a bankruptcy, a judge will order all collecting actions to cease, an important feature called the automatic stay. The automatic stay, applicable to all types of bankruptcy filings, means that the mere request for bankruptcy protection automatically stops and brings to a cessation certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. That means all creditors will have to go through a US Bankruptcy Court trustee in order to deal with their debtors.

So, in the case of our female debtor in the illustration, the answer to her question is to not worry so much about the lawsuit and go ahead and look for that bankruptcy attorney. When she successfully files for bankruptcy protection, the US Bankruptcy Court can shut down any unfinished lawsuits through the automatic stay, and a discharge of the bankruptcy will allow the female debtor to remove any judgments against her by filing the proper documents in the proper courts.

Divorce and loss of income are not the only factors that cause you to go bankrupt. Becoming bankrupt can happen for a variety of reasons including but not limited to a divorce, loss of income, foreclosure on personal or business property, failure to pay bills on time, health problems, poor business decisions, bad timing, bad advice, or a poor economy. According to the Bankruptcy Institute, the latest statistics show bankruptcies are still on the rise for 2011 increasing by 11% in February.

Maybe like so many other Americans, you have felt you have had to use your credit in order to make ends meet and until times get better. Maybe you are paying only the minimum payments in the form of interest on those cards. If this is case, you might be in financial trouble to the point of being bankrupt. As a general rule of thumb, you are legally financially bankrupt if your current sustainable income will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans while paying on them for five years. If you are bankrupt, common sense indicates you will need a bankruptcy lawyer in order to properly understand how complex bankruptcy laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Baltimore, Maryland, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

Silence Is Not Always Golden In The Valley

This personal bankruptcy story was posted on the internet in January of 2011 as comments in a bankruptcy discussion: “My father still hasn’t filed for bankruptcy and hasn’t gained employment. It’s really seeming very hopeless on the employment side and his depression/unmotivated attitude is keeping him from proactively searching for jobs. And now on top of it all. He totaled my car that I was storing at his apartment until he had a job so he could insure and drive it. I own the car and it’s uninsured. The other persons insurance is saying they will come after me since I’m the owner. I have nothing and don’t really know what to do. There’s a court date next Monday and I’m not sure if I should go or not. Would filing for Bankruptcy now help at all for this?”

The debtor’s good son in this personal bankruptcy illustration has previously asked for advice on whether his father should file bankruptcy or not. His father has no assets or income, and is disabled to boot. The son is taking care of him paying the current basic living expenses- rent and utilities, while the father lives on food stamps. Bill collectors are jamming the airways and mail system trying to collect from the judgment-proof father. In this update, the son wants to know if it is time to file for bankruptcy on behalf of his father after the father totaled his car. The son is thinking of opting out of the court scene to defend himself. The son appears to possess very little assets, but he does have income to protect. Sometimes, being silent is not always golden.

Filing for bankruptcy protection is really designed to protect enough of your assets to give you a fair try for starting over. If you absolutely have no income or assets, as is the case of the father, you are truly judgment-proof. That means creditors can get judgments on you all day long, and there will still be nothing they can get. That also means that there is really no reason to file for bankruptcy in a case like the father until he has something to lose. Once you file for bankruptcy, you have to wait up to 8 years before you can file again.

The son, on the other hand, has something to lose. He could have his wages garnished if the insurance company wins a judgment, and he lives in a state that allows garnishment. He also might have liens attached to any real property he owns, like his car. That means when he sells the car, he will have to pay the lien holder first, that is, if that state allows attachments to vehicles. The son, depending on the outcome of the lawsuit concerning his father’s totaling his car, may need bankruptcy protection much more than the father. Certainly, it might be in his best interest to attend the court date to protect his own interests. Also from the sound of the events, considering hiring an attorney to represent him at the court date might be wise.

As a society, we have come a long way since the days of debtor prisons.  Based on the information provided, neither son or father should go to jail for getting into their predicament. The Constitution provided for our protection against those antiquated ways when it gave Congress the power to legislate bankruptcy law making the primary laws governing bankruptcy federal. State laws supplement the federal laws by clarifying the necessary details. The laws have been designed to protect both creditor and debtor making bankruptcy a legal proceeding designed to allow the honest person or business to work their way out of a bad financial situation, or in some cases, to start afresh.

There is no easy way out of a bad financial situation. They can happen to anyone, and the way out of them amounts to a lot of hard work and determination to overcome. Maybe you have found yourself in a difficult financial situation, and you are considering bankruptcy as an option. If this is the case, you are going to need a bankruptcy lawyer to properly help you understand how the complex bankruptcy laws may apply in your situation. So, if you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan areas of  McAllen, Edinburg, or Mission, Texas, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

Cities Go Bankrupt Too

Being bankrupt is defined by the Merriam Webster online dictionary as a person or entity that  is insolvent. Insolvent is defined by the same dictionary as (1) being unable to pay debts as they fall due in the usual course of business or (2) having liabilities in excess of a reasonable market value of assets held. For our use in this article, we will define bankrupt as a person or entity which  has more liabilities in excess of a reasonable market value of assets held. Taking the concept further, if you cannot pay your liabilities down within a five year period, even after selling all of your assets, you are bankrupt.

Regardless of your age, status, or reputation, becoming bankrupt can happen to anyone at any given time. Being bankrupt can even happen to cities too. According to a news article written in Fortune Magazine published May of 2010, three well known cities in America are on the verge of being bankrupt. They are Detroit, Michigan, Jefferson County, Alabama, and Harrisburg, Pennsylvania. Bankruptcy being no respecter of a person or an entity will continue to occur in our world as long as there is a need for money and loans to be made. Whether you are a person or an entity, the creditors that loaned you the money will come calling to collect when collection is due. Unlike individual people or companies, when a city goes bankrupt, there is not enough precedent set to know exactly what can happen. Not many cities have filed for bankruptcy, and the ones that have are usually bailed out by another government entity. Too, unlike bankrupt individuals and companies, a governing entity can raise taxes to support their own bailout. Let it suffice if you know and understand that even cities can go bankrupt, the knowledge may help you alleviate the stigma often associated with bankruptcy proceedings.

As an individual or company, there are usually three things that can occur when you find yourself bankrupt. First, you can do nothing until your creditors take court action, repossess any items covered by secured loans, foreclose on any items covered by secured loans, or hound you with collection harassment and threats. Secondly, you can wait until your creditor initiates bankruptcy proceedings by filing a bankruptcy in a federal court on your behalf, consequently, giving your creditors the upper hand. Thirdly, you can file a voluntary bankruptcy in federal court to cause an automatic stay against your creditors.

The moment you file a  bankruptcy, a judge will order all collecting actions to cease, an important feature called the automatic stay. The automatic stay, applicable to all types of bankruptcy filings, means that the mere request for bankruptcy protection automatically stops and brings to a cessation certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. That means all creditors will have to go through a trustee in order to get any of their claims back.

Having to file or being forced to file for bankruptcy is not a sign of weakness, laziness, immorality, or dishonesty. Becoming bankrupt can happen for a variety of reasons including but not limited to a divorce, foreclosure on personal property, failure to pay bills on time, loss of income, health problems, poor business decisions, bad timing, or just bad advice. Since our bankruptcy laws were designed to help an honest individual work their way out of an unfortunate but honest financial dilemma, there is really no reason to view a bankruptcy proceeding as anything other than a tool used by our society to potentially help alleviate a bad financial situation between two parties.

Recognizing that even cities can become bankrupt should help you realize that with the economy like it is today, you may find yourself also facing the reality of being bankrupt. If this is the case, common sense should dictate to you that consulting with a bankruptcy lawyer about your situation instead of doing nothing or waiting for your creditors to act may be a wise decision. Our bankruptcy laws are complex, and the average layman will probably need help in understanding how they best apply to you. If you have determined you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Orlando, Florida, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

A Checklist for Justifying Bankruptcy

These personal bankruptcy story excerpts were posted on the internet in January of 2009 as comments in a discussion on bankruptcy: “I just wish there was some checklist for justifying Bankruptcy…I have a nice home, full of nice things, I have 3 little kids and $275k in debts, including the house…I already had $20k in student loans and my husband lost his job before we ever paid our first payment, but we refused to leave this house. We stuck it out. Lived on credit cards… Oh how I wish we would have sold a few years ago when we could have walked away. We could eat less. I tried a business venture, invested $10k. The business was going OK until I got pregnant again…No more get rich quick schemes, I won’t do that anymore. We earn a decent living and we could rent a place for less than our interest only adjustable mortgage. Since we wrapped up everything into our mortgage we can’t get out of the debt without leaving the house…We have been irresponsible I suppose. Just uneducated. We aren’t delinquent on any bills yet. I’ve called Hope for Homeowners and a Bankruptcy attorney. I have appointments for both next week. It will be my second appointment with the bankruptcy attorney. I have explored foreclosure, deed in lieu of foreclosure, debt settlement, no more consolidation for me…I tried that a few times already. I just want to go into this unafraid. To give my husband some peace and my kids too. Now I’m afraid of a whole new set of fears…a new school district, a clunker car, years without credit. I am ready for the challenge. I don’t want credit anymore. I want a friendly landlord and a balance in my savings account…What I can hope for now is that my credit is truly ruined, and I won’t be tempted to do this again.”

The debtor in this personal bankruptcy illustration wants a checklist for justifying her desire to file for bankruptcy protection. There are good reasons for filing for bankruptcy protection but simple desire is not one of them. Although filing for bankruptcy protection is your Constitutional right to do so at any time, you might get your case dismissed by a Bankruptcy judge if you cannot follow the bankruptcy guidelines as laid out by bankruptcy law.

Simply put, becoming bankrupt is a black and white experience much more than it is a gray one. As a general rule of thumb, you are legally financially bankrupt if your current sustainable income will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans while paying on them for five years. Five years is the maximum legal number of years a United States Bankruptcy Court allows an individual to work their way out of bankruptcy protection. The debtor in our illustration indicates she and husband earn a decent living, are not delinquent on any bills, and still have not maxed out all their credit cards. All of these are indicators they might still be able to pay down principal over five years, and if that is the case, they are really not bankrupt. Can they still justify  filing? Technically, yes. Again, it is a simple matter of your right to do so, but again, that does not mean you can satisfy the guidelines of the US Bankruptcy Court when you do file.

The courts have just as much responsibility of protecting the rights of the creditors as they do the debtors. The laws have been designed to protect both creditor and debtor making bankruptcy a legal proceeding designed to allow the honest person or business to work their way out of a bad financial situation, or in some cases, to start afresh. So, you may feel like completely starting over financially, but you may find out that means satisfying the Court’s demands to meet the financial obligations you can. In the case of our debtor who wants to start over, she may end up with a five year payout plan that looks a whole lot like her current lifestyle. What she may need more than justifying her right to file for bankruptcy protection is to weigh the pros and cons of doing so, something it sounds like she is doing in consulting with a bankruptcy lawyer.

Bankruptcy laws are complicated, and common sense indicates you will need a bankruptcy lawyer in order to properly understand how these complex laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Columbus, Ohio, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.